The Central Bank of Montenegro (CBCG) has agreed to partner with Ripple to launch the country’s first digital currency. The digital currency will be in the form of a national stable coin or Central Bank Digital Currency (CBDC). The partnership with Ripple is targeted at developing a strategy and pilot program for the said digital currency.
Ripple is a crypto company utilizing the blockchain to provide payment solutions. CBDC being a digital currency issued by the central bank of a nation has become one of the recent projects on the desk of most countries, of which Montenegro has joined the list.
Montenegro central bank aims to digitize financial services through the introduction of digital currency, hence, providing better access to financial services for its citizens.
Through the project, the CBCG will work with the Government of Montenegro and Montenegro’s academia to develop a usable digital currency and put to test the main functionality and potential of blockchain technology.
Secondly, the project would help analyze the benefits and possible risks that CBDCs or national stablecoins are likely to pose with concerns about electronic means of payment availability, security, efficiency, and compliance with regulations. Additionally, the project would analyze the safety, rights, and privacy of end users.
The CBCG Governor Radoje Žugić mentioned that “the CBCG is actively ensuring it maintains an efficient financial system,” and added the bank itself is committed to following the latest national banking trends.
The different stages involved include identification and design. Identifying the practical application of a digital currency or national stablecoin and the design to simulate its circulation and use under controlled conditions.
According to James Wallis, Ripple’s Vice President of Central Bank Engagements & CBDCs, the move will introduce the next level of digital transformation to the financial infrastructure of Montenegro. Also, he expressed being pleased that the CBCG chose to collaborate with Ripple to help launch its first digital currency.
Alongside this, the European Central Bank is also working to develop the Digital euro concept as a future means of making a safe, secure, and electronic payment within the euro area.
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